OSHA’s $afety Pays Program: ROI on Workplace Safety

Denise GillinRisk Management

By William J. Foehlinger, III, Assistant Vice President, Senior Risk Control Consultant

Money is the language of business. The majority of workplace decisions are made to enhance profitability through greater productivity, efficiency, and quality. In many instances, business owners are slow to commit resources to suggestions for corrective action unless they include quantifiable data, useful information they understand.

What’s my Return On Investment?

Return On Investment (ROI) is not a term that’s typically associated with the concept of workplace safety. We need to shift the paradigm to include more intangible measurements in safety ROI calculations as a reflection of human costs like loss in quality of life after an accident, employee retention and workplace reputation that are much harder to quantify.

How do we show ROI on safety investments?

OSHA’s “$afety Pays” program can help employers assess the impact of occupational injuries and illnesses on their profitability. This program uses a company’s profit margin, the average cost of an injury or illness, and an indirect cost multiplier to project the amount of sales a company would need to cover those costs. The program is intended as a tool to raise awareness of how occupational injuries and illnesses can impact a company’s profitability, not to provide a detailed analysis of a particular company’s occupation injury and lines costs.

The “$afety Pays” Program will:

  • Allow users to pick an injury type from a drop-down list or to enter their workers’ compensation costs.
  • Prompt users for information to do the analysis, including their profit margin and number of injuries.
  • Generate a report of the costs and the sales needed to cover those costs.

Safety ROI is a tough calculation, but in compliance-based industry, it’s a decision we all have to make. If we cannot demonstrate our ability to contribute to the bottom line, we may be seen as hindering it.

For more information on OSHA’s $afety Pays Program, Click Here.

To begin the OSHA $afety Pays Program, Click Here.

Contact the Murray Risk Management Team or your Murray Risk Control Consultant at 717.397.9600 for additional assistance on resources and tools for prevention, including materials contained in the Succeed / KPA risk management platform.



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